May 28 (Bloomberg) -- German plant and machinery orders declined the most on record in April from a year earlier as the worst recession since World War II curbed exports and investment.

Orders dropped an annual 58 percent, the most since data collection started in 1950, after falling an annual 35 percent in March, Frankfurt-based VDMA said in a statement today. Export orders slumped 60 percent while domestic demand dropped 52 percent.

The global financial crisis has damped demand for German exports, forcing manufacturers to curb production and cut jobs. Chancellor Angela Merkel’s government yesterday decided to provide an additional 3 billion euros ($4.2 billion) in tax relief to medium-sized companies on top of stimulus measures worth 82 billion euros ($118 billion) already passed.

“Signs of a trough aren’t recognizable yet,” VDMA Chief Economist Ralph Wiechers said in an e-mailed statement. “Only early indicators allow for hope.”

German business confidence rose for a second month in May and manufacturing orders rebounded on April. Still, the economy, Europe’s largest, will contract 6 percent this year, according to a government forecast.

In the three months through April, overall machinery orders fell 47 percent from a year earlier, with export orders slumping 48 percent and domestic demand decreasing 46 percent.

Wiechers said VDMA is maintaining its forecast for a decline in orders of between 10 percent and 20 percent this year. “We chose to phrase our forecast for 2009 in such a manner that it still fits the picture today,” he said.

The VDMA surveys all large German machinery makers and most small ones. Its statistics capture orders at companies that employ 15 percent of all factory workers and account for 13 percent of total manufacturing sales.

To contact the reporter on this story: Jana Randow in Frankfurt jrandow@bloomberg.net.

Last Updated: May 28, 2009 04:22 EDT